Access Denied (Security Filtering)

Hello all,
I have run into a bit of a stumper for me. I have a GPO that I have created
to block the Internet from some lab computers where I work. For what ever
reason thou, I cannot get them to apply. When i run the RSOP I get the error
Access Denied (Security Filtering). I have created a security group and put
the computers that I dont want access to the Internet with in the group. I
also put it in the security filtering section of the GPO. I have the loopback
processing applied.

Any ideas?

Thank you all in advance for your help and support.
.